Japan's Government Pension Investment Fund, Tokyo, hired a manager to run ¥500 billion ($3.7 billion) benchmarked to the newly launched Morningstar Japan ex-REIT Gender Diversity Tilt index.
A GPIF spokeswoman declined to say which manager was hired and said the name of the manager or managers will be disclosed in the next annual report in July.
The $1.4 trillion pension fund withdrew the funds from its existing passive investment portfolio benchmarked to existing environmental, social and governance indexes and redistributed it to the new manager in March, GPIF President Miyazono Masataka said in a statement April 14.
"Based on our belief that the sustainable growth of investee companies and the whole market is crucial for the stable investment returns from assets under management, GPIF takes gender diversity, as one of the ESG factors, into consideration in its passive investment in domestic and foreign equities," Mr. Miyazono said in the statement.
Morningstar announced the launch of the index April 14, and said in a separate statement that the index was developed using Morningstar's index methodologies and Equileap's Gender Equality Scorecard.
The allocation follows GPIF's existing use of the Morningstar Developed Markets ex-Japan Gender Diversity index, which was first implemented in December 2020 and to which GPIF had about $3.4 billion in assets benchmarked as of March 31.
The Morningstar Japan ex-REIT Gender Diversity Tilt index provides exposure to Japan-based companies with strong gender diversity policies across sectors, including Sony Group, Mitsubishi UFJ Financial Group and Daiichi Sankyo Co.
"Japan has the largest median gender pay gap of the G-7 countries. And while we have made some progress in recent years on gender diversity metrics, there is clearly much more work to be done to raise the level of gender diversity in our corporations," said Yu-Tsung Chang, president of Morningstar-owned investment management company Ibbotson Associates Japan, in the Morningstar statement.
"This will improve our competitive standing in global business and, ultimately, contribute to a better society. Indexes and other market data on gender diversity play an important role in benchmarking progress," Mr. Chang said.